Some days ago, Koverly, a Waltham, MA-based provider of a B2B payments solution, raised $7.6M in Seed funding. In conjunction with the announcement, Igor Ostrovsky, CEO and co-founder, replied to our questions about himself, the company, the product, the funding, and future plans.
FinSMEs: Hi Igor, can you tell us a bit more about yourself? What’s your background?
My professional background is sort of a tale of two Igors. On the one hand, I’ve always been deep in finance and technology. My career began in traditional credit risk management at Capital One, followed by a shift into ecommerce, mobile finance and digital applications for payments and credit underwriting. In parallel from about 2003 to 2018, I launched and ran my own small importing, distributing and retail business in the beverage alcohol space.
During this time, I also consumed a good amount of espresso. (And, actually, I still do.)
Necessary caffeine intake aside, this put me in a very unique position to understand first hand what Main Street businesses need to succeed and fintech industry know-how to create products that actually help.
FinSMEs: Let’s speak about Koverly. What is the market problem you want to solve? What is the real opportunity?
One of the biggest challenges I had to navigate as an importer was cash flow. Importers have to manage extensive cash flow cycles – the time it takes from purchasing something overseas, waiting for its arrival, selling it domestically and receiving payment often takes several months. It’s a tricky balance. An importer’s growth is contingent on the inventory they can afford to purchase. However, if they overspend on inventory they risk depriving operations, sales and marketing the funds necessary to grow.
Inventory is the lifeblood for an importer’s growth and this is directly impacted by cashflow. However, options for financing are limited and often tied to the business owner’s personal assets.
My co-founder Mike Medvinsky and I launched Koverly to give importers access to the short term capital they need to grow their business in a responsible way.
FinSMEs: What are the features differentiating the product from competitors?
Koverly is the first and only buy now, pay later (BNPL) solution to give a 30-day extension on FX payments at no cost to the buyer or seller.
Businesses also have the flexibility to further extend payments over four, eight or 12 fixed weekly installments. Once a company is approved for KoverlyPay, options for extended payback are embedded in checkout and can be used to pay any vendor in the world.
Because of Koverly’s deep industry knowledge of importing businesses, our proprietary process is faster and more generous than other options – providing customized underwriting of up to $500,000 that does not affect the applicant’s credit score.
Our new KoverlyPay offering for FX transactions is designed to give importers enough extra working capital to unlock at least one additional inventory turn per year. For a typical importing business this can boost annual profitability by 50–100%.
All of this is integrated into a global payments platform with some of the most competitive foreign exchange rates seamlessly built into the checkout flow.
It’s a game changer for global trade.
FinSMEs: You just raised a new funding round. Please, tell us more about it.
Since Koverly’s inception in 2021, we have raised $7.6 million in seed funding from Accomplice VC, Vinyl Capital, and One Way Ventures.
FinSMEs: Can you share some numbers and achievements of the business?
Koverly has been generating meaningful revenue since global payments were introduced in July 2022. Foreign currency transactions today account for 50% of our $200 million in annualized payment volume. Since the beginning of 2023, Koverly’s monthly loan originations have grown 6x.
FinSMEs: What are your medium-term plans?
With the expansion of our credit lending capacity, we plan to deploy $70 million in new loans to U.S.-based importers in the next 6–12 months. We will also continue to expand our payment product offerings specific to global trade to further increase our international footprint.
FinSMEs
30/08/2023